Unformatted text preview: so on) o Income (the flow of money given to an individual in a given year) o Expenditure (the more money that one spends, the more one should be able to pay taxes) • Individual spending can be related to standard of living, and a higher standard of living represents a greater ability to pay taxes • In Canada all three approaches of ability-to-pay are used for taxation purposes The progressive approach • The more income you earn the more money you have to pay • Taxes increases for those who can afford to pay it • Less burden on families who earn less income • Intended to charge individuals the same amount of taxes in regards to their incomes • Prevents the rich form getting richer or the poor from getting poorer • Example: Family Jones has two working parents. Mr. Jones earns $20,000 a year and therefore pays 10% income tax. Mrs. Jones earns $50,000 per year and therefore pays 20% income tax....
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- Fall '07
- Economics, government spending pay